<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
--------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
----------------------- ------------------------
Commission File Number 0-21926
----------------------------------------------------------
AER ENERGY RESOURCES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 34-1621925
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4600 Highlands Parkway, Suite G, Smyrna, Georgia 30082
--------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 433-2127
--------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
There were 24,404,399 shares of Common Stock outstanding as of April 30, 1997.
<PAGE> 2
AER ENERGY RESOURCES, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1997
INDEX
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Balance Sheets - March 31, 1997 and December 31, 1996. 3
Condensed Statements of Operations - Three Months Ended March 31, 4
1997 and 1996, and Period From July 17, 1989 (Date of Inception)
to March 31, 1997.
Condensed Statements of Cash Flows - Three Months Ended March 31, 5
1997 and 1996 and Period From July 17, 1989 (Date of Inception)
to March 31, 1997.
Notes to Condensed Financial Statements - March 31, 1997. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 8
RESULTS OF OPERATIONS
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
</TABLE>
Page 2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents............................................ $ 16,676,501 $ 18,728,427
Trade accounts receivable (less allowances of $1,283 at March 31,
1997 and $2,411 at December 31, 1996)............................... 5,342 3,475
Inventories.......................................................... 141,381 100,399
Prepaid expenses..................................................... 226,468 178,137
------------ ------------
Total current assets.................................................. 17,049,692 19,010,438
Equipment and improvements:
Machinery and equipment.............................................. 3,095,601 2,993,555
Office equipment..................................................... 457,348 445,926
Leasehold improvements............................................... 254,766 254,766
------------ ------------
3,807,715 3,694,247
Less accumulated depreciation........................................ 2,167,727 2,033,392
------------ ------------
1,639,988 1,660,855
Other long term assets............................................... 16,841 16,841
------------ ------------
Total stockholders' equity........................................... $ 18,706,521 $ 20,688,134
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................... $ 177,123 $ 168,911
Accrued royalties - related party.................................... 35,000 30,000
Other accrued expenses............................................... 296,748 309,855
------------ ------------
Total current liabilities............................................. 508,871 508,766
Deferred rental expense............................................... 2,666 2,957
Stockholders' equity:
Convertible debentures............................................... 720,961 909,198
Preferred stock, no par value:
Authorized - 10,000,000 shares; no shares issued and outstanding.... -- --
Common Stock, no par value:
Authorized - 100,000,000 shares; issued and outstanding -
24,364,570 shares at March 31, 1997 and 24,276,080 shares at
December 31, 1996.................................................. 65,785,666 65,675,743
Notes receivable from common stock sales............................. (71,875) (71,875)
Unearned stock compensation.......................................... (211,815) (328,455)
Deficit accumulated during the development stage..................... (48,027,953) (46,008,200)
------------ ------------
Total stockholders' equity............................................ 18,194,984 20,176,411
------------ ------------
Total liabilities and stockholders' equity............................ $ 18,706,521 $ 20,688,134
============ ============
</TABLE>
Note: The condensed balance sheet at December 31, 1996 has been derived from
the audited financial statements of AER Energy Resources, Inc. at that date but
does not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
See notes to condensed financial statements.
Page 3
<PAGE> 4
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 17, 1989
(DATE OF
THREE MONTHS ENDED MARCH 31, INCEPTION) TO
---------------------------------- MARCH 31,
1997 1996 1997
----------- ----------- -------------
<S> <C> <C> <C>
Revenues................... $ 12,315 $ 14,728 $ 242,090
Cost of sales.............. 293,825 553,672 4,377,712
----------- ----------- ------------
Gross margin............... (281,510) (538,944) (4,135,622)
Costs and expenses:
Research and development
- related party............ -- -- 1,145,913
- other.................... 1,194,392 656,436 26,741,259
Marketing, general and
administrative
- related party............ 24,507 49,558 1,168,101
- other.................... 749,194 741,539 17,173,740
----------- ----------- ------------
Total costs and expenses... 1,968,093 1,447,533 46,229,013
----------- ----------- ------------
Operating loss............. (2,249,603) (1,986,477) (50,364,635)
Interest income............ 244,349 235,374 2,930,747
Interest expense
- - related parties.......... -- -- (264,445)
----------- ----------- ------------
Net loss................... $(2,005,254) $(1,751,103) $(47,698,333)
=========== =========== ============
Net loss per share......... $ (0.08) $ (0.09) $ (3.65)
=========== =========== ============
Weighted average shares
outstanding................ 24,349,268 19,303,197 13,057,838
</TABLE>
See notes to condensed financial statements.
Page 4
<PAGE> 5
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 17, 1989
(DATE OF
THREE MONTHS ENDED MARCH 31, INCEPTION) TO
-------------------------------- MARCH 31,
1997 1996 1997
------------ ------------ --------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss................................................ $(2,005,254) $(1,751,103) $(47,698,333)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization.......................... 134,335 143,730 2,563,734
Amortization of unearned stock compensation............ 23,827 36,000 535,294
Grant of compensatory stock options.................... -- -- 14,063
Loss on disposal of equipment.......................... -- 7,890 38,591
Deferred rental expense................................ (291) (1,913) 2,666
Accretion of discount on marketable securities......... -- -- (187,407)
Changes in operating assets and liabilities:
Trade accounts receivable............................. (1,867) (4,299) (5,342)
Inventories........................................... (40,982) (21,543) (141,381)
Prepaid expenses and other current assets............. (48,331) (12,724) (226,778)
Accounts payable...................................... 8,212 (236,829) 177,123
Accrued royalties payable-related party............... 5,000 10,000 35,000
Other current liabilities............................. (13,107) 5,239 455,682
----------- ----------- ------------
Net cash used in operating activities................... (1,938,458) (1,825,552) (44,437,088)
INVESTING ACTIVITIES:
Purchases of equipment and improvements................. (113,468) (42,806) (3,868,640)
Purchase of marketable securities....................... -- -- (11,512,296)
Purchase of license agreement........................... -- -- (250,000)
Proceeds from marketable securities..................... -- -- 11,700,000
Changes in other assets................................. -- -- (140,501)
----------- ----------- ------------
Net cash used in investing activities................... (113,468) (42,806) (4,071,437)
FINANCING ACTIVITIES:
Proceeds from revolving credit note to related parties.. -- -- 5,430,000
Issuance of convertible debentures, net of issuance
costs.................................................. -- -- 9,834,500
Payments on notes payable to related parties............ -- -- (1,150,000)
Payments received on promissory notes................... -- -- 57,425
Issuance of common stock, exercise of stock options..... -- -- 133,546
Issuance of common stock, net of issuance costs......... -- -- 50,879,555
----------- ----------- ------------
Net cash provided by financing activities............... -- -- 65,185,026
----------- ----------- ------------
(Decrease) increase in cash and cash equivalents....... (2,051,926) (1,868,358) 16,676,501
Cash and cash equivalents at beginning of period....... 18,728,427 16,417,152 --
----------- ----------- ------------
Cash and cash equivalents at end of period............. $16,676,501 $14,548,794 $ 16,676,501
=========== =========== ============
</TABLE>
See notes to condensed financial statements.
Page 5
<PAGE> 6
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1997
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. These financial statements should be
read in conjunction with the Company's audited financial statements included in
the Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1996. Operating results for the
three month period ended March 31, 1997 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1997 or any
interim period.
2. SIGNIFICANT ACCOUNTING POLICIES
Description of Business
AER Energy Resources, Inc. was incorporated on July 17, 1989 and since
inception has engaged in the development and commercialization of high energy
density, rechargeable zinc-air batteries. The Company's operations to date
have primarily been focused on developing and updating the technology, setting
up the manufacturing process, testing and selling zinc-air batteries,
recruiting personnel and similar activities. The Company began selling its
first product in August 1994. Sales from August 1994 through March 31, 1997
have been minimal. Until significant product sales occur, the Company is
considered to be a development stage company for financial reporting purposes.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash, bank deposits and highly liquid
investments with maturities of three months or less when purchased and are
stated at cost, which approximates market.
Page 6
<PAGE> 7
Inventories
The Company's inventory has been valued at the lower of cost or market,
using the first in, first out method. The components of inventory are listed
below.
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
<S> <C> <C>
Raw material $111,026 $ 95,814
Work in process 28,503 4,585
Finished products 1,852 --
-------- --------
Total $141,381 $100,399
======== ========
</TABLE>
Use of Estimates
In accordance with FASB Statement No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," the Company
records impairment losses on long-lived assets used in operations when events
and circumstances indicate that the assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amounts of those assets. Based on the Company's estimate of
future undiscounted cash flows, the Company expects to recover the carrying
amounts of its fixed assets. Nonetheless, it is reasonably possible that the
estimate of undiscounted cash flows may change in the near term resulting in
the need to write-down those assets to fair value. During the three months
ended March 31, 1996, the Company recorded a write-off of obsolete equipment
with a net book value of $7,890, which was included in marketing, general and
administrative expenses.
Page 7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Since its inception, the Company has been a development stage company
primarily engaged in developing rechargeable zinc-air battery technology,
establishing the manufacturing process, defining and developing market
opportunities, testing and selling rechargeable zinc-air batteries and
recruiting and training personnel. The Company currently markets the AER Energy
PowerSlice LXTM, a zinc-air accessory battery designed for the Hewlett-Packard
OmniBook 600 and 800 portable computers. The Company has recorded limited
revenue from the sales of this product for the three month period ended March
31, 1997. The Company has incurred cumulative losses of $47.7 million since
inception to March 31, 1997. The Company expects to continue to incur
operating losses at least through the end of 1998.
The Company was formed to develop and commercialize rechargeable zinc-air
batteries for portable electronic products using technology licensed from
Dreisbach Electromotive, Inc. ("DEMI"). DEMI was formed in 1982 to conduct
research and development on electric vehicles and battery systems utilizing,
among others, zinc-air technology. DEMI's zinc-air development programs
included applications for electric vehicles and portable products. The Company
has licensed, through DEMI (the "DEMI License"), the rights to use certain DEMI
technology including zinc-air, in non-motor vehicle applications, while DEMI
has retained the rights to zinc-air technology for motor vehicle applications
and to its other technologies for motor vehicle applications and batteries
producing over 500 watts continuous power output. Effective October 15, 1993,
the DEMI License was amended so that, under certain circumstances, some or all
of the royalties due under the DEMI License are payable to the shareholders of
DEMI rather than to DEMI.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
The Company generated net revenues of $12,000 for the three months ended
March 31, 1997, compared to $15,000 for the three months ended March 31, 1996.
The Company's cost of sales for the three months ended March 31, 1997 was
$294,000 as compared to $554,000 for the three months ended March 31, 1996.
The high cost of sales is primarily due to the manufacturing inefficiencies and
high material costs resulting from low production volumes.
Research and development expenses increased to $1,194,000 for the three
months ended March 31, 1997, from $656,000 for the same period in 1996. This
increase was primarily the result of an allocation of $423,000 in manufacturing
overhead costs to research and development,
Page 8
<PAGE> 9
reflecting the extensive use of the Company's manufacturing facilities for
technology development and product testing during the three months ended March
31, 1997. The Company also experienced an $82,000 increase in material, design
and tooling costs, a $32,000 increase in personnel related costs, and a $13,000
increase in facility costs in the quarter ended March 31, 1997, as compared to
the same period in 1996. These increases were partially offset by a $9,000
decrease in depreciation expense.
Marketing, general and administrative expenses decreased to $774,000 for
the three months ended March 31, 1997 from $791,000 for the same period in
1996. This decrease was due to a $56,000 reduction in warranty expense, a
$34,000 decrease in the write-off of obsolete inventory, and a $25,000
reduction in minimum royalty expense pursuant to the DEMI License. The Company
also experienced a $20,000 decrease in facility costs, a $20,000 decrease in
professional fees, and a $20,000 decrease in marketing, advertising and public
relations expense. These decreases in the quarter ended March 31, 1997,
compared to the same period in 1996 were partially offset by a $124,000
increase in personnel related costs in 1997 and a $34,000 credit to bad debt
expense in 1996 resulting from the collection of a receivable that had been
written off.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
As of March 31, 1997, the Company had cash and cash equivalents of $16.7
million. The Company anticipates using these funds as needed to fund capital
equipment purchases, research and development efforts, sales and marketing
activities, production of commercial and prototype zinc-air battery products,
development of relationships with portable computer manufacturers (OEMs),
working capital and general corporate purposes as determined by management.
In the interim, the Company invests any excess funds in government securities
and other short-term, investment grade, interest-bearing instruments.
Net cash used in operating activities increased to $1.9 million for the
three months ended March 31, 1997 from $1.8 million for the same period in
1996, primarily due to the increases in costs and expenses discussed above in
"Results of Operations".
For the three months ended March 31, 1997, the Company used net cash of
$113,000 for equipment purchases as compared to $43,000 for equipment purchases
and leasehold improvements for the same period in 1996.
During the three months ended March 31, 1997, $200,000 in principal of the
Company's 8% convertible debentures plus accrued interest were converted into
88,490 shares of the Company's common stock at an average conversion price of
$2.47 per share.
Pursuant to the DEMI License, the Company has agreed to pay DEMI royalties
of 4% of net sales, subject to certain minimum amounts and to possible
increases or decreases to a maximum of 4% and a minimum of 2%, as specified in
the DEMI License. The applicable percentage of royalties is currently 4% of net
sales. The Company recorded royalty expense for the three month periods ended
March 31, 1997 and 1996 of $25,000 and $50,000, respectively.
Page 9
<PAGE> 10
Minimum royalty expenses are included in marketing, general and administrative
expenses in the statements of operations. Actual royalties due as a percentage
of sales under the DEMI License are recorded in cost of sales. As of March 31,
1997 and December 31, 1996, $35,000 and $30,000, respectively, of these royalty
payments remained unpaid. The future minimum royalty payments specified by the
DEMI License consist of the following:
Year Ending December 31,
<TABLE>
<S> <C>
1997................................................$100,000
1998................................................$100,000
1999................................................$ 50,000
</TABLE>
The Company currently anticipates that its existing cash balances will
fund operations and continue technology development at the current level of
activity into 1998. However, it may be necessary for the Company to increase
its research and development and marketing expenses as it continues to work to
improve its zinc-air technology and to expand its relationships with portable
computer OEMs. It may also be necessary for the Company to expand its
manufacturing capacity in order to meet anticipated 1997 sales requirements.
The Company will continue to need working capital beyond that generated by its
May 1996 stock and warrant placement, and depending on the Company's results of
operations, the Company may find it necessary to obtain additional working
capital on an accelerated basis or in amounts greater than currently
anticipated. There can be no assurance that additional equity or debt
financing will be available when needed or on terms acceptable to the Company.
To date, both costs and development times have substantially exceeded the
Company's forecasts. In addition, the battery business is a chemical
processing business and, as such, the Company will require specialized
equipment to manufacture its zinc-air batteries. Future equipment additions
could exceed current Company estimates in cost, complexity and development
time.
The market price of the Company's common stock has fluctuated
significantly since it began to be publicly traded on July 1, 1993 and may
continue to be highly volatile. Factors such as delays by the Company in
achieving development goals, inability of the Company to commercialize or
manufacture its products, fluctuation in the Company's operating results,
changes in earning estimates by analysts, announcements of technological
innovations or new products by the Company or its competitors, perceived
changes in the markets for various OEM applications incorporating the
Company's products, the announcement or termination of relationships with OEMs,
and general market conditions may cause significant fluctuations in the market
price of the Company's common stock. The market prices of the stock of many
high technology companies have fluctuated substantially, often unrelated to the
operating or research and development performance of the specific companies.
Such market fluctuations could adversely affect the market price for the
Company's common stock.
This report contains statements which to the extent that they are not
recitations of historical fact, may constitute "forward looking statements"
within the meaning of applicable federal securities laws. All forward looking
statements contained in this report are intended to be
Page 10
<PAGE> 11
subject to the safe harbor protection provided by applicable federal securities
laws. For a discussion identifying some important factors that could cause
actual results to vary materially from those anticipated in the forward looking
statements made by the Company, see the Company's Annual Report on Form 10-K
for the year ended December 31, 1996, including, but not limited to, the
"Liquidity, Capital Resources and Financial Condition" discussion in
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Page 11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<S> <C>
11 Statement of Computation of Earnings per Share.
27 Financial Data Schedule (For SEC Use Only)
</TABLE>
(b) REPORTS ON FORM 8-K:
The registrant did not file any reports on Form 8-K during the three
months ended March 31, 1997.
Page 12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AER ENERGY RESOURCES, INC.
Date: May 8, 1997 By: /s/ David W. Dorheim
----------------------------------
David W. Dorheim, President and
Chief Executive Officer
Date: May 8, 1997 By: /s/ M. Beth Donley
----------------------------------
M. Beth Donley, Vice President,
Chief Financial Officer, Secretary
and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
Page 13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
- ------ ----------- -------------
<S> <C> <C>
11 Statement of Computation of Earnings per Share. 15
27 Financial Data Schedule (For SEC Use Only)
</TABLE>
Page 14
<PAGE> 1
EXHIBIT 11
AER ENERGY RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 17, 1989
THREE MONTHS ENDED (DATE OF
MARCH 31, INCEPTION) TO
-------------------------- MARCH 31,
1997 1996 1997
------------ ------------ -------------
<S> <C> <C> <C>
Weighted average common
stock outstanding........ 24,349,268 19,303,197 11,634,344
Common stock issued and
stock options granted in
accordance with SAB No.
83....................... -- -- 1,423,494
----------- ----------- ------------
Total.................... 24,349,268 19,303,197 13,057,838
=========== =========== ============
Net loss................. $(2,005,254) $(1,751,103) $(47,698,333)
=========== =========== ============
Per share amount......... $ (0.08) $ (0.09) $ (3.65)
=========== =========== ============
</TABLE>
Page 15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONDENSED BALANCE SHEET AND SUMMARY OF OPERATIONS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 16,676,501
<SECURITIES> 0
<RECEIVABLES> 6,625
<ALLOWANCES> 1,283
<INVENTORY> 141,381
<CURRENT-ASSETS> 17,049,692
<PP&E> 3,807,715
<DEPRECIATION> 2,167,727
<TOTAL-ASSETS> 18,706,521
<CURRENT-LIABILITIES> 508,871
<BONDS> 0
0
0
<COMMON> 65,785,666
<OTHER-SE> (48,027,953)
<TOTAL-LIABILITY-AND-EQUITY> 18,706,521
<SALES> 12,315
<TOTAL-REVENUES> 12,315
<CGS> 293,825
<TOTAL-COSTS> 293,825
<OTHER-EXPENSES> 1,968,093
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,005,254)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,005,254)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,005,254)
<EPS-PRIMARY> 0
<EPS-DILUTED> (0.08)
</TABLE>
